NASCAR Stock Fund Adviser David Dube & Peak Wealth Face SEC Charges

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Peak Wealth Opportunities LLC, a Florida-based investment fund and fund manager David W. Dube face Securities and Exchange Commission charges for failing to provide SEC examiners with records of a mutual fund advisory business that invested in NASCAR-related stocks.

Despite repeated requests by SEC examiners, Dube and Peak Wealth failed to furnish certain records to the SEC about a mutual fund they advised called the Stock Car Stock Index Fund.

According to an SEC order initiating administrative proceedings, Peak Wealth was the adviser to the Stock Car Stock Index fund from 2008 to June 2010. SEC examination staff requested records from Peak Wealth and Dube in 2010 while examining Peak Wealth’s advisory business and the operations of the fund.

The SEC further alleges that Dube and Peak Wealth:

  • Failed to make and keep certain required financial records.
  • Failed to withdraw Peak Wealth’s registration with the SEC and make other required filings.
  • Failed to provide the fund’s board of directors with information reasonably necessary to assess Peak Wealth’s advisory fees.

Simultaneously with the SEC’s examination in 2010, the fund’s board requested information from Peak Wealth and Dube as part of the fund’s required annual evaluation of its advisory agreements. Section 15(c) of the Investment Company Act of 1940, which requires the annual evaluation, also requires advisers to provide their boards with information reasonably necessary to conduct those evaluations. Despite requesting additional time to respond to the board, Peak Wealth and Dube failed to provide any of the requested documents. The board subsequently terminated Peak Wealth’s advisory agreement and liquidated the fund by returning the money to investors.

Under the relevant rules, the SEC could seek to permanently bar Dube from association with an SEC registered investment adviser or broker dealer. The SEC alleges that Peak Wealth willfully violated Sections 203A and 204 of the Advisers Act of 1940 and Rules 203A-1(b)(2), 204-1(a)(1), 204-2(a)(1), (2), (4), (5), and (6) thereunder, and Section 15(c) of the Investment Company Act of 1940. The SEC charged Dube with willfully aiding and abetting and causing Peak Wealth’s violations.

Fort Lauderdale Securities Litigation Attorney and FINRA Arbitrator

Contact Fort Lauderdale securities litigation attorney Howard N. Kahn, Esq. if you or someone you know has a securities or broker dispute. In addition to being an experienced securities litigation attorney, Mr. Kahn also serves as a FINRA arbitrator for individual investors, brokers, and brokerage firms. You can reach him at 954-321-0176 or online.

Biremis Corp. & CEO Peter Beck Barred by FINRA

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Biremis, Corp., formerly known as Swift Trade Securities USA, Inc., was recently expelled by The Financial Industry Regulatory Authority (FINRA). Biremis President and Chief Executive Officer, Peter Beck, was barred by FINRA. The disciplinary actions resulted from supervisory violations related to detecting and preventing manipulative trading activities such as “layering,” short sale violations, failure to implement an adequate anti-money laundering program, and financial, operational and numerous other securities law violations.

Thomas Gira, FINRA Executive Vice President and Head of Market Regulation, said, “In creating a business that allowed a significant volume of overseas day trading to pass through its systems on a regular basis, Biremis and Mr. Beck needed to devote the appropriate level of resources and personnel to ensure that this business was properly supervised, yet failed on both accounts. Biremis’ inadequate supervisory system resulted in the firm violating multiple rules designed to protect the integrity of the markets and to ensure that member firms adhere to the high standards required of the brokerage industry.”

FINRA found that during various periods from June 2007 to June 2010, Biremis and Mr. Beck failed to establish a supervisory system reasonably designed to achieve compliance with the applicable laws and regulations prohibiting manipulative trading activity. Among other things, Biremis’ supervisory system failed to include policies and procedures designed to detect and prevent layering on U.S. markets. Layering involves the placement of non-bona-fide orders on one side of the market in order to cause market movement that will result in the execution of an order entered on the opposite side of the market, after which the non-bona-fide orders are then canceled. Biremis also failed to establish policies and procedures reasonably designed to detect and prevent manipulative activity designed to affect the closing price of a security. As a result, Biremis failed to detect and prevent potential layering activity and potential manipulation of the closing price of equity securities on U.S. markets.

FINRA found that despite the fact Biremis’ only business was to execute transactions on behalf of day traders around the world, Biremis and Mr. Beck failed to implement an adequate anti-money laundering (AML) program to comply with the Bank Secrecy Act. Among the violations related to its AML program, Biremis failed to properly detect suspicious activities and file suspicious activity reports (SARs) when appropriate. Also, Mr. Beck appointed an unqualified and untrained individual to supervise Biremis’ AML compliance program and Biremis failed to provide adequate AML training to employees.

Biremis and Mr. Beck also violated a number of additional securities laws and rules. Biremis failed to maintain a margin system and margin accounts, and did not have policies and procedures in place related to the use of margin. The firm also failed to prepare customer reserve computations and failed to maintain a special reserve bank account for the exclusive benefit of customers. In addition, Biremis placed thousands of short sale orders, which was in violation of an emergency order issued by the SEC that temporarily banned short selling in certain securities. Also, between at least April 2008 and May 2009, Biremis improperly calculated its net capital, operating in net capital deficiency by up to $25 million. Additionally, the firm failed to maintain all required emails and instant messages over a five-year period.

In concluding this settlement, Biremis and Mr. Beck neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.

Fort Lauderdale Securities Litigation Attorney and FINRA Arbitrator

Contact Fort Lauderdale securities litigation attorney Howard N. Kahn, Esq. if you or someone you know has a securities or broker dispute. In addition to being an experienced securities litigation attorney, Mr. Kahn also serves as a FINRA arbitrator for individual investors, brokers, and brokerage firms. You can reach him at 954-321-0176 or online.

HUD Launches “Homeowner Help” for Mortgage Assistance

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“Homeowner Help” is a new public service announcement (PSA) and television ad campaign being launched by the department of U.S. Housing and Urban Development.  An accompanying  Homeowner Help website and a Mortgage Assistance Guide are additional resources to educate homeowners at risk of mortgage default learn about potential assistance from the recent $25 billion mortgage servicing settlement.

It is not entirely clear how homeowners in trouble qualify for financial assistance. “There’s no simple, one-sentence explanation,” Shaun Donovan, secretary of the Department of Housing and Urban Development, said in a recent conference call with reporters.

Mortgage assistance will vary with each homeowner’s situation and may include:

  • Mortgage payment assistance for unemployed or underemployed homeowners.
  • Principal reduction to help homeowners get into more affordable mortgages.
  • Funding to reduce or eliminate homeowners’ second lien loans.
  • Help for homeowners who are transitioning out of their homes and into more affordable  places of residence.

In April of 2012, a Federal District Court approved the landmark $25 billion agreement between the Justice Department, the Department of Housing and Urban Development, 49 state attorneys general and the nation’s five largest mortgage servicers – Ally/GMAC, Bank of America, Citi, JP Morgan Chase, and Wells Fargo – to address mortgage loan servicing and foreclosure abuses. The settlement will provide up to $25 billion in relief to borrowers and direct payments to the states and federal government. It is the largest multi-state settlement since the Tobacco Settlement in 1998.

The PSA can be viewed at www.hud.gov and www.nationalmortgagesettlement.com.

Fort Lauderdale Foreclosure Defense Attorney

If you are at risk of losing your home to mortgage foreclosure, there is action you can take. Contact Fort Lauderdale mortgage foreclosure attorney Marcy Resnik to discuss how you can defend your legal rights in a foreclosure. You can contact Ms. Resnik online or call her at 954-321-0176.

Municipal Securities Report Issued by SEC

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Enhanced disclosure requirements for municipal securities investors are suggested in a new comprehensive report issued by the Securities and Exchange Commission.

State and local governments issue municipal securities to finance a wide variety of projects that are critical to building and maintaining the nation’s infrastructure.

At the start of 2012, there were more than one million different municipal bonds outstanding totaling $3.7 trillion, with 75 percent held by individual “retail” investors.

Despite its size and importance, the municipal securities market has not been subject to the same level of regulation as other sectors of the U.S. capital markets due to broad exemptions under federal securities laws for municipal securities.

Without a statutory regime for municipal securities regulation, the SEC’s investor protection efforts in the municipal securities market have been limited. The SEC’s report discusses potential legislative changes that could help improve disclosures to investors. For instance, the report recommends that Congress consider authorizing the SEC to set baseline disclosure standards and require municipal issuers to have audited financial statements.

Other potential legislative changes recommended in the report to help improve disclosures and practices in the municipal securities market include:

  • Eliminating the availability of Securities Act and Exchange Act exemptions for conduit borrowers who are not municipal entities.
  • Authorizing the Commission to establish the form and content of financial statements for municipal issuers who issue municipal securities, and to recognize a designated private-sector body as the standard setter for generally accepted for federal securities law purposes.
  • Providing a safe harbor from private liability for forward-looking statements of repeat municipal issuers that satisfy certain conditions.
  • Permitting the Internal Revenue Service to share information with the SEC that it obtains from returns, audits, and examinations related to municipal securities offerings, particularly in instances of suspected securities fraud.
  • Providing a mechanism, through trustees or other entities, to enforce compliance with continuing disclosure agreements and other obligations of municipal issuers to protect municipal securities bondholders.

In addition to potential legislation, the SEC’s report identifies potential rulemaking by the Commission or the Municipal Securities Rulemaking Board and enhancement of best practices by the municipal securities industry.

Click on the link for the SEC Report on the Municipal Securities Market.

Fort Lauderdale Securities Litigation Attorney and FINRA Arbitrator

Contact Fort Lauderdale securities litigation attorney Howard N. Kahn, Esq. if you or someone you know has a securities or broker dispute. In addition to being an experienced securities litigation attorney, Mr. Kahn also serves as a FINRA arbitrator for individual investors, brokers, and brokerage firms. You can reach him at 954-321-0176 or online.